Why We Buy

by Paco Underhill

  Still, Amazon has its definite downsides. For one thing, try contacting them if you have a problem with your order (entire websites are devoted to this common quandary). If you have a problem, it’s hard to ignore the little voice in your head telling you that Amazon’s powers-that-be haven’t the slightest interest in hearing from you. Try to contact them via e-mail, and you’ll get back a terse yet genial automated response. You can spend days fruitlessly trying to track down a customer service number. The price we pay for convenience, one-click shopping and a ritualized retail experience is that no one recognizably human sits at the other end of our Amazon transactions—just a seamlessly calibrated database of e-mails that roll toward our in-boxes.

  This issue got a little personal when Envirosell started working for Microsoft, a company that has become one of our largest and most enthusiastic clients. For them, we deconstruct the software and video game sections of stores across the world (as someone who can’t get past the first series of screens in Halo—a classic Xbox game—I know more about how Xbox 360 is shopped globally than anyone really has a right to know). At one point early on in our Microsoft relationship, one of the company’s executives called me in a panic. Was it true, as per Amazon, that I was the coauthor of a new manual on Unix/Linux, their rival operating system? Of course not, yet there I was on Amazon (for God’s sake, how many Paco Underhills can there be in the world?). Our colleague was relieved but made it clear there had been a few waves in Redmond, home of Microsoft’s corporate headquarters, about a vendor who might be a spy.

  What to do? E-mails to Amazon led to more automated replies. Finally, exasperated, I managed to get hold of the company’s general counsel, who told me there wasn’t a whole lot he could do to resolve my problem, that the issue lay with one of their many distributors. When I made it clear that they had to do something, that Amazon’s mistake was jeopardizing my business, the most he could offer was that he would remove the offending coauthorship immediately; however, Amazon couldn’t guarantee that as subsequent uploads came along, my name wouldn’t reappear as the Unix/Linux manual’s coauthor. To this day, I check the site pretty vigilantly.

  As I alluded to earlier, today’s tidal wave of websites, products, choices, stuff, information and outright misinformation is a dilemma that suggests the need for some future “Ask an Expert” service, someone who will condense two thousand websites into the dozen or so that are of vital assistance to you, the shopper. Certain websites such as Head Butler are on top of this already. Its proprietor simply hand-picks stuff he likes, from Shure E3c Sound Isolating Earphones to the new Levon Helm album; writes a short, witty essay on why these things are so great; then directs interested consumers to Amazon. How terrific the future of the web would look if we could rent an expert to help us make our way around the net and by so doing, shrink it. Our colleagues at LivePerson.com have launched a new online service where aside from getting shopping advice, consumers can, say, rent a microbiologist or a distinguished software engineer and pay them by the minute to field their questions. As the literacy of the web’s latest generation begins to develop, we may find that the monopoly on information that the Googles and Microsofts and Yahoos possess will break down into processes that are far more discriminating than what we have right now.

  But I’m not crossing my fingers.

  From my perch studying the buying habits of consumers both online and off, for a long time I’ve considered the web as analogous to water. It inches and flows and streams and pools into ditches and culverts and creeks and channels and puddles where someone has already done the surveying and architecting and ditch-digging. And the net, with a good sixth sense for this pre-dug inventory of opportunities, makes its way there intuitively. It fills up those holes. Now and then it even plugs them up pretty well. But it still hasn’t resolved the same issue that’s facing today’s retailers, namely, what’s global and what’s local? Can a global process have any relevance to you as a local individual?

  Me, I’ll take the news my local radio station gives me any day, whether on-air or online, versus what Excite or Google or Yahoo delivers. Sure, I can custom-design a start page—sports, business, national and international news, a weather forecast and so forth—but except for me now knowing it’s going to rain next Tuesday, customizable doesn’t mean a whole lot here. It doesn’t really touch me personally. I need to know about what’s happening in my city and neighborhood, whether the Yankees pulled off a late-inning win last night and what’s playing at the Angelika Film Center six blocks south. So what a lot of people, including myself, get frustrated by is the very same universal software solution that Internet types keep claiming is the medium’s biggest strength. The germ of the idea is already here—but what if we could get to a point where we’re developing processing engines that are eminently more local, i.e., locally targeted, than what we have right now?

  I point the finger here at venture capitalists. Instead of putting their bucks into $10 million businesses, most of them are worshipping at the altar of a $100 million business, something that will grow ten thousand percent over the next three years. Everybody has set his or her sights on being the big bucks behind the next online behemoth. Which isn’t to say those companies don’t deserve their wild success or their billions. But the result’s been that even with Facebook, the concept of a socially integrated network still hasn’t been customized to the person, the place or the environment. After all, while the Internet may be in the public domain, Google, MSN, YouTube and the other huge internet players are all businesses answerable first and foremost to their shareholders.

  My ideal local online process? One in which you could pick and choose your processing engine based on your own interests and beliefs, so it ends up far more responsive to you, the user. Periodically I’ll pick up a copy of The Villager—one of my neighborhood rags—since their ads and listings have direct relevance to my actual lower-Manhattan existence. Fashion clothing emporiums on the web might consider doing the same. After all, New York City females dress differently from the way females dress in San Antonio, Texas, and the way females dress in Los Angeles. The “favorite” or “recommended” outfits on the Macy’s and Eileen Fisher websites run the risk of looking great on a Texan matron but ludicrous on a forty-year-old Hollywood executive. These sites might consider doing what Netflix does, which is supply a list of the most popular titles within its subscribers’ zip codes. Again, “most popular” rarely coincides with “the best,” but such a system would come closer to wedding a local solution to a global process.

  A website called DailyCandy, which is geared toward trendy twenty-and thirtysomething women, is another encouraging example. Subscribers can select among a dozen or so cities, ranging from San Francisco and Chicago to London. If you live in or near Miami, DailyCandy will not only tell you where the coolest place to buy lingerie in South Beach is, but also tells you what’s going on culturally in the city over the weekend, what to do with the kids, as well as the latest, coolest places to eat. To me, that’s at least a start.

  Another issue I continue to have with the web: How is it supported? What are its basic economic underpinnings? Does advertising keep it going? Does the government? Do local institutions? The jury’s still out. If it’s advertising by companies, we can point to examples like Samsung, which devotes large chunks of its marketing budget to Internet ads on fly-fishing websites and other places where it seeks its demographic. Samsung has gotten terrific mileage out of this, too. But again, Samsung came to that decision the hard way—because the viewing public generally ignores, bypasses, gossips during or TiVos their way through traditional thirty-second TV spots. Plus, televised ads cost an arm and a leg to produce, and newspapers and magazines aren’t much better, since they’re no longer dominated by five or six periodicals that 60 percent of all Americans regularly glance at week after week.

  The bottom line is that it’s the failure of the traditional engines for selling and delivering products that’s created the opportun
ity for the engine known as e-commerce to exist.

  Which really isn’t high praise when you think about it.

  The question remains: Why has this second generation of the web succeeded better than the first go-round? As I’ve said, it isn’t that the Internet has gotten any cooler, sleeker, faster, sexier, better or more efficient. One big reason is because women have begun devoting serious—and I mean serious—time to the Internet. E-commerce Generation II is doing just fine.

  The January 2008 Nielsen Global Online Survey reports that more than 85 percent of the world’s online population has used the Internet to buy something—that’s up 40 percent from 2006. The world’s most ardent Internet shoppers come from South Korea, where close to 100 percent of all Internet users have bought stuff online, followed by Germany, the United Kingdom and Japan. The U.S. lags in eighth place. The most popular online purchases are books, followed by clothing and accessories; then shoes; then videos, DVDs and games; then airline tickets and electronic equipment bringing up the rear. Online shoppers are a loyal bunch, too. Sixty percent of them claim they buy products mostly from the same sites.

  Among the things females do online, aside from actually closing the deal? I call it sort of shopping. Here’s how it breaks down:

  The Pre-Shop: The retail equivalent of a blind date. Nothing heavy goes on here, just a lot of flirting and data gathering. As she surfs away, your wife or girlfriend or sister or daughter can acquaint herself with a dress from Target.com, new binders for school or the latest model of fluffy moccasin from L.L.Bean. The phenomenon of the pre-shop is particularly prevalent when women are in the market for automobiles, to a far greater extent than men. Since Dante would have to invent a tenth circle of hell to mirror most females’ experiences inside car dealerships, women go online, figure out how much that new Prius or Sienna or Civic costs, with or without automatic transmission, XM radio, a satellite-linked navigation system, splash guards, moon roof and other goodies, then walk into a dealership with confidence, armed with facts, figures and prices.

  Thus, almost incidentally, the web serves as a resource for actual bricks-and-mortar stores. If consumers are feeling lazy, tired, time-crunched or antisocial, they can look up the book, movie, TV or preferred Cuisinart model beforehand, maybe scan a few consumer reviews, then make an unimpeded beeline for the thing when they reach the store, which saves them from having to do a half-hour walkabout or ask a clerk who may or may not know, or care much, about the difference between one model and the next. Alternately, if consumers don’t feel like going to the bookstore or the local Blockbuster, they can save themselves a drive by using Amazon and Netflix and simply strolling to the mailbox at the end of their driveway.

  Secondary Shopping Therapy: Just imagine it—no crowds. No malls. No snaking lines. No young moms blocking the aisles with their gray Bugaboo Cameleon strollers. It’s the wireless equivalent of paging through Vogue—the ultimate fantasy maker and time killer. It gives women instant access to boutiques and high-end baubles they might not otherwise feel comfortable shopping for. In this case, there are no Hermès clerks giving them the once-over. No saleswomen with attitude. Online, they can stroll into Harry Winston, duck into Louis Vuitton and check out the Canyon Ranch in Tucson, the Ritz in Paris or the Mandarin Oriental in Singapore. It’s like being invisible and having wings. They can even do it naked, exhausted, in need of a shower or while simultaneously watching a rerun of their favorite TV show.

  The sense of today being the first time a lot of consumers have had access to goods without having to buy them mimics the sense that the first department stores gave their consumers in the 1850s. Among other things, the department store served as an impetus to middle-class upward mobility. Up until that point, it was assumed that if you walked into a store you were there to buy, or at least had the means to purchase. Thus many people were exposed to a life they’d never seen before, in many cases fueling their appetite to succeed. Then and now, the department store is a very democratic institution. It invites everyone in to take a look and/or gawk to his or her heart’s content.

  Time Savings: An excellent example: Christmas. Consumers can skim all the good stuff from the most wonderful time of the year while avoiding its horror-show aspects—crowds, jammed parking lots, frenzied parents elbowing one another aside for Wiis or Flip camcorders or whatever the gizmo du jour is. Online, they can point, click, add to cart, checkout and boom, a bonsai tree is on its way to a nephew, a red sweater to a niece, and two quarts of Legal Sea Foods’ clam chowder overnighted to an uncle in Florida who misses nothing about living in New England other than the occasional local specialty.

  Still, shopping on the web doesn’t always fall into one of these categories. The net has had its notable success stories. How do you explain the popularity of merchants like Bluefly, which sells discounted designer fashion for men and women? It’s like an even more animated version of the Home Shopping Network. Bluefly has overcome the human need to smell, touch, taste and feel that C3 cashmere sweater or that pair of Marc Jacobs pants, and based on great copy and nice pictures and an ever-changing exhibition of good-looking stuff, they’re able to move product consistently through their portal. It’s the ultimate in cyber-window-shopping, and the price is right.

  The next thing you know, though, you’re a woman who finds herself with forty-three designer handbags and no place to put them.

  Which is where we get into one of the great pluses of the web—its ability to create secondary markets, a comfortable, reliable system for recycling possessions that would otherwise rot, mildew or rust in the garage or attic. Whether it’s a previously owned Mercedes or a slightly scratched Les Paul tobacco-sunburst Gibson guitar that you place on eBay, the Internet has institutionalized a virtual flea market of sorts. I have a number of colleagues who supplement their incomes by specializing in certain categories of goods in a way that would have been unthinkable a decade ago. Old railroad books, estate wineglasses, Moroccan tiles, antique postcards, it doesn’t matter—someone out there wants it. More power to them.

  Even Amazon has gotten into the game, because often the profit margin on selling used products is higher than selling new. Amazon gives you the option of buying many books, new or used. For out-of-print volumes, Amazon connects to a network of used-book dealers who may make as much if not more money on the shipping and handling charges than they do on the sale of the book itself.

  Outside of the virtual flea market environment, how do merchants get people to buy online? Well, there’s the easy way, and it goes something like this: You are enamored of a certain brand of running shoes or cut of khaki pants, you’ve been wearing them for years, you know your size, and that’s that. Checkout—and a replacement is zooming its way toward you.

  Another way the Internet has worked well is in children’s online communities, like Club Penguin, Webkinz or other sites where kids are entreated to buy, tend and shower their love on virtual pets. If you buy a penguin, well, hell, a penguin needs an igloo, right? He has to eat, too. Despite the tariff—five bucks here, five bucks there—these clubs help grow kids’ computer and keyboarding skills (though they remain extremely sedentary experiences). Luca, the young son of Gustavo, who runs our data department, could turn on a computer, get online and make his way to his favorite game site by the time he was three years old.

  What puzzles me, frankly, is how well visual artists have managed to sell paintings online, and sometimes for thousands of dollars, too. Up until now, artists could either sell their paintings at art fairs or street shows, or else exhibit at a solo or group show where the opening price starts at, say, $2,000. By going direct and virtual, artists have created a new category equivalent to a farmer’s market, one that combines the street fair and the art world. The success of this model may be attributable to the desire on the part of artists to bypass the protocol of art galleries, and to customers’ discomfort with the art world’s snoot factor, or to consumers’ sheer geographical distance from the hubs of the ar
t world, but it also comes down to a kind of naïve trust. Still, I’ll be damned if it doesn’t work, as the idea of someone shopping for art online without actually seeing the thing in person leaves me a little incredulous. Nonetheless, I’m glad that a lot of artists have managed to pull this off.

  If someone has a clear-cut sense of focus, it’s not only possible to sell stuff online, but you can also do incredibly well.

  A friend runs an online vehicle for a small boutique housewares store in New York. He sells more than half a million dollars a year online off a little laptop in a back office. He finds great-looking stuff in small quantities—books, toys, tabletop junk etcetera—and gets it featured in magazines. People fall in love with it and buy it. He’ll sell until he runs out, then starts the process all over again. I love going onto his website, because it’s one of the best gifting solutions I know. Why does he succeed? In part it’s because he’s known in the magazine world, and the magazine media design editors have come to admire his cherry-picking ability, his revolving inventory, his good taste.

  Had enough shopping? Let’s go mingle.

  Poke me. Write something on my wall. Glance at my friends list and the roughly three hundred digital photos and home videos I’ve uploaded. Send me a virtual potted plant, a virtual cupcake. Find out my relationship status and, if I’m not attached, what it is I’m looking for—friendship or the real thing.

  If you thought social networking was limited to cocktail parties and private clubs and business seminars, have a look at Facebook, today’s virtual incarnation of the electronic tribe—one created by those two visionary villains Frank Lloyd Wright and Henry Ford.